The European Commission today adopted the decision
on the proposed Danish national plan for allocating carbon dioxide
(CO2) emission allowances for the
2008-2012 trading period of the EU Emissions Trading Scheme (EU ETS). The
Commission accepted the total number of emission allowances proposed by Denmark
equal to 24.5 million tonnes of CO2 per year. This is 2 million tonnes lower
than Denmark's verified emissions of 2005. The plan will be approved under the
condition that Denmark reduces companies use of credits from emission-reduction
projects carried out in third countries, from the proposed 19% to 17%. The
Emissions Trading Scheme ensures that greenhouse gas emissions from the energy
and industry sectors covered are cut at least cost to the economy, thus helping
the EU and its Member States to meet their emission commitments under the Kyoto
Protocol.

Environment Commissioner Stavros Dimas said: "Denmark has proposed a sound
national allocation plan which we have accepted with only a minor change. The
Danish government has understood the need to ensure that the Emissions Trading
Scheme remains a successful weapon for fighting climate change. There are three
more plans to be assessed. These will be finalised swiftly to ensure an orderly
transition to the second phase of the EU ETS starting in 2008."

NAPs determine for each Member State the 'cap,' or limit, on the total amount
of CO2 that installations covered by the EU ETS can emit, and specify
how many CO2 emission allowances each plant will receive.

The Commission is responsible for assessing Member States' proposed NAPs
against 12 allocation criteria listed in the Emissions Trading Directive. The
Commission may accept a plan in part or in full.

The assessment criteria seek, among other things, to ensure that plans are
consistent (a) with meeting the EU's and Member States' Kyoto commitments, (b)
with actual verified emissions reported in the Commission's annual progress
reports, and (c) with technological potential for reducing emissions. Other
assessment criteria relate to non-discrimination, EU competition and state aid
rules, and technical aspects. To this end, the Commission is requiring the
following change in the Danish NAP:

The proposed extent of companies' use of credits from emission-reduction
projects carried out in third countries under the Kyoto Protocol's flexible
mechanisms[1]
is not consistent with the rule that these mechanisms should be used to
supplement domestic action on emissions. Denmark is required to ensure the use
of these credits does not represent an addition to its annual allocation of more
than 17.01 %.The Commission's approval of the plan will become automatic once
Denmark has made the appropriate change.

Approved allowances for 2005-2007, verified emissions in 2005, proposed caps
for 2008-2012, approved caps for 2008-2012, additional emissions covered in 2008
to 2012 and limit on the use of credits from emission-saving projects in third
countries. (All figures are annual)

[1] These mechanisms are
known as Joint Implementation (JI) and the Clean Development Mechanism
(CDM).

[2] The figures indicated
in this column comprise emissions in installations that come under the coverage
of the scheme in 2008 to 2012 due to an extended scope applied by the Member
State and do not include new installations entering the scheme in sectors
already covered in the first trading period.

[3] The JI/CDM limit is
expressed as a percentage of the member state’s cap and indicates the
maximum extent to which companies may surrender JI or CDM credits instead of EU
ETS allowances to cover their emissions. These credits are generated by
emission-saving projects carried out in third countries under the Kyoto
Protocol’s project-based flexible mechanisms, known as Joint
Implementation (JI) and the Clean Development Mechanism (CDM).

[4]Including
installations which Belgium opted to exclude temporarily from the scheme in
2005

[5] Italy has to include
further installations. The amount of additional emissions is not known at this
stage.

[6] Additional
installations and emissions of over 6 million tonnes are already included as of
2006.

[7] Verified emissions for 2005
do not include installations which the UK opted to exclude temporarily from the
scheme in 2005 but which will be covered in 2008 to 2012 and are estimated to
amount to some 30 Mt.

[8] The sum of verified
emissions for 2005 does not include installations which the UK opted to exclude
temporarily from the scheme in 2005 but which will be covered in 2008 to 2012
and are estimated to amount to some 30 Mt.